March consumer price index (CPI) is due for release on Friday. Producer prices, released Tuesday, ticked upwards after a sharp December/January fall on the back of plunging crude oil prices.
Average hourly earnings growth (non-supervisory manufacturing jobs), however, retreated below 1.0%.
CPI is likely to remain heavily affected by oil prices, but core CPI (excluding food and energy) is expected to remain close to the Fed’s target of 2.0%.
From Seeking Alpha:
The euro fell to a fresh 12-year low on Wednesday, extending a broad decline just days after the ECB launched its €1T bond-buying program, while the dollar index soared to its highest in more than 11 years at 98.95, buoyed by expectations that the Fed could soon lift U.S. interest rates. Nearly all now believe the FOMC will remove the word “patient” from its policy statement after its March 17-18 meeting, opening the door for a rate increase in June.
Not so fast. US consumer price growth (annual % change) to end of January 2015 fell below zero.
Core CPI is slowing at a far gentler rate because it excludes energy prices (as well as food).
Wage pressures in the manufacturing sector are declining, despite solid job numbers, indicating there is still plenty of slack.
With inflationary pressures easing, why the haste to raise interest rates? I believe that Janet Yellen will move when the time is right. And not before.
